Core Scientific Inc. (CORZQ) has disclosed a new risk, in the Corporate Activity and Growth category.
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The Merger Agreement between Core Scientific Inc. and CoreWeave includes provisions that may deter other potential acquirers from making more favorable offers, due to ‘no-shop’ restrictions and substantial termination fees. These restrictions limit the company’s ability to engage with third parties for alternative proposals, potentially preventing shareholders from benefiting from superior offers. The Board of Directors is obligated to recommend the merger unless a superior proposal arises, but any change in recommendation could result in a $270 million termination fee payable to CoreWeave. This financial penalty and the restrictive terms could discourage competing bids, impacting the company’s strategic options.
Overall, Wall Street has a Moderate Buy consensus rating on CORZQ stock based on 1 Buy.
To learn more about Core Scientific Inc.’s risk factors, click here.